Finance MCQs

Page No. 27

Coupon payment of bond which is fixed at time of issuance____________?


aRemains same

✓


bBecomes stable

✖


cBecomes change

✖


dBecomes low

✖


View Answer Remains same

Market in which bonds are traded over-the-counter than in an organized exchange is classified as__________?


aOrganized markets

✖


bTrade markets

✖


cCounter markets

✖


dBond markets

✓


View Answer Bond markets

Reinvestment risk of bond’s is usually higher on______?


aIncome bonds

✖


bCallable bonds

✓


cPremium bonds

✖


dDefault free bonds

✖


View Answer Callable bonds

Bonds that can be converted into shares of common stock are classified as_________?


aConvertible bonds

✓


bStock bonds

✖


cShared bonds

✖


dCommon bonds

✖


View Answer Convertible bonds

Rate on debt that increases as soon market rises is classified as________?


aRising bet rate

✖


bFloating rate debt

✓


cMarket rate debt

✖


dStable debt rate

✖


View Answer Floating rate debt

When price of bond is calculated below its par value, it is classified as___________?


aclassified bond

✖


bDiscount bond

✓


cCompound bond

✖


dConsideration earning

✖


View Answer Discount bond

Bonds with deferred call have protection which is classified as__________?


aProvision protection

✖


bProvision protection

✖


cDeferred protection

✖


dCall protection

✓


View Answer Call protection

Real risk-free interest rate in addition with an inflation premium is equal to_____________?


aRequired interest rate

✖


bQuoted risk-free interest rate

✓


cLiquidity risk-free interest rate

✖


dPremium risk-free interest rate

✖



Stated value of bonds or face value is considered as_____________?


aState value

✖


bPar value

✓


cBond value

✖


dPer value

✖


View Answer Par value

A bond whose price will rise above its face value is classified as________?


aPremium face value

✖


bPremium bond

✓


cPremium stock

✖


dPremium warrants

✖


View Answer Premium bond

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